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Question: Which of the seven reason for acquisition best justifies Amazon’s acquisition of Whole Foods?

10 Oct 2022,9:29 PM

 

Which of the seven reason for acquisition best justifies Amazon’s acquisition of Whole Foods? Use data from the case to support your position.
Which of the seven problems of acquisition manifested at Whole Foods? Use data from the case to support your analysis.
Based on your analysis, what is one strategic AND one tactical action you recommend that Amazon should take to manage Whole Foods going forward? Use data from the case to support your position

Expert answer

 

The reason for Amazon’s acquisition of Whole Foods that best justifies the purchase is the company’s desire to increase its presence in the grocery market. Amazon has been looking for ways to break into the grocery market for some time, and Whole Foods gives the company a foothold in this industry. With the purchase of Whole Foods, Amazon will be able to offer customers a one-stop shop for all their shopping needs, which could help the company compete with rivals like Walmart.

 

NOTE:

1. Expansion of product offerings: Amazon is looking to expand its product offerings beyond books and electronics, and Whole Foods provides a natural extension into the grocery market.

 

2. Increased market share: Amazon is already the largest online retailer, and Whole Foods will give them a significant foothold in the brick-and-mortar grocery market.

 

3. Cost savings: Amazon can leverage economies of scale to purchase Whole Foods at a lower price than they would be able to otherwise.

 

4. Improved delivery infrastructure: With the acquisition of Whole Foods, Amazon will be able to improve their delivery infrastructure and better compete with companies like Uber and GrubHub.

 

5. Increased customer base: Amazon can attract new customers by offering them the convenience of online grocery shopping combined with the low prices and wide selection offered by Amazon.com.

 

6. Diversification of revenue sources: The acquisition of Whole Foods will help Amazon reduce its reliance on ecommerce for revenue, and provide a new stream of income from groceries sales.

 

7. Strategic fit: Amazon has been expanding into new markets in recent years, and the acquisition of Whole Foods fits well with their overall strategy.

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